Catalog

Philippines
ADB Review [ December 2006 - January 2007 ]

In the Philippines, opportunities to expand water sector lending are hindered by some of the same factors that affect Indonesia, says Mr. Frauendorfer, particularly weak capacity at the local level for developing new projects.

The Philippines has also suffered in recent years from the poor performance of previous projects and the sorry state of Government finances, although a cleanup of the ADB loan portfolio and a concerted effort by President Gloria Macapagal Arroyo's administration have improved the situation markedly.

Outside Metro Manila, urban water supply is mainly provided either by about 500 water districts, under the authority of the Local Water Utilities Administration (LWUA), or by more than 1,000 local government-operated water utilities. Many of the small water districts and local government-operated water utilities lack the staff skills to prepare new projects.

One recent project to help improve water supply in urban areas outside Manila successfully improved the capacity of water districts for implementing water supply subprojects and operation and maintenance of their systems.

Before the project, only about 70% of the urban population had access to safe water. In smaller towns, the coverage was much lower than the national urban average. ADB approved the Small Towns Water Supply Sector Project in 1996 to enhance urban water supply coverage

PHILIPPINES Outside Metro Manila, water is mainly provided by about 500 water districts, under the authority of the Local Water Utilities Administration, or by more than 1,000 local government-operated water utilities

Outside Manila, ADB is looking at the financing of water districts either through LWUA—probably using the Multitranche Financing Facility (MFF)—or, on a sub-sovereign basis with larger, wellperforming water districts. The MFF seems to be a suitable financing modality to address the demand for improved urban water supply in water districts and local government-operated utilities.

Within Manila, ADB has also prepared MFF financing for the rehabilitation and improvement of the Angat Dam watersource system, which provides 98% of the city's water supply. The MFF for the Angat Water Utilization and Aqueduct Improvement Project would provide a $400 million credit line for the Metropolitan Waterworks and Sewerage System (MWSS), and would be part of a 10-year investment program amounting to about $1.4 billion. This program covers major investments in improving and expanding raw water sources, transmission, treatment facilities, distribution networks, and storage. The MWSS will be responsible for the execution of various subprojects under the operation.

Learn more about ADB's water projects in the Philippines

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